The process of applying for a loan is usually quite tedious. A lot of paperwork, many deadlines … Add that almost nobody asks for a loan on a whim. If he does, it is because he really needs the money. If you have ever had to request a safe one you know what we mean. Let’s talk about the possible reasons when you are denied a loan.
Can you imagine that the bank had given you a “no” for an answer? Your face would have been poker.
Five reasons why you are denied a loan
You are a delinquent, the most important reason why you are denied a loan.
If your name appears in a delinquency record with RAI or ASNEF, you can forget about your loan. Unless it is a very bad payment but very small and you can show great future solvency, no bank will dare to lend you money.
The delinquent files, as they are also known, are consulted by financial institutions to verify whether or not their potential clients pay their debts. And as they say that prevention is better than cure, you better check if you are in one and, if so, that you take the necessary steps to get out of it as soon as possible.
Your income is not enough.
If your income is reduced or unstable, financial institutions will not want to become your creditors. The same happens when the applicant’s work is precarious or if the end of the employment contract that binds him to his company is coming.
This is logical, since without consolidated income and fixed work, how can a person guarantee the payment of future loan installments? Banks seek security and will only lend money if they expect they can recover it without problems.
Your credit history is not the best.
The credit history or credit history is a report that collects the financial background of any person. In other words, it is a history of your payments and your defaults. The information provided by this history will help financial institutions determine whether or not they can trust you.
Have you been a good payer all your life and have never been late in your payment obligations? Then you have nothing to fear. If, on the contrary, you have ever been late with the letter of the mortgage or returned a receipt, this will play against you to get the loan.
You cannot guarantee it.
When the loan amount is too high, the bank could demand a guarantee, that is, a guarantee that you will fulfill your payment obligation. In this way, the bank minimizes the risk of default, since if you cannot pay the debt, the guarantor will pay it for you.
You can take it for granted that if the financial institution asks you for the guarantee and you cannot present it, they will give your request a folder and you will run out of money.
Your age, another reason why you are denied a loan.
Sometimes, it is enough to add and subtract to reach the conclusion that some elderly people cannot obtain certain loans, since their life expectancy and the repayment term of the loan do not fit. Which bank would dare, for example, to grant a 30-year mortgage to a 65-year-old retiree?
Other times the opposite is true, that the person requesting the loan is too young. The bank may not rely on the “problems” derived from its youth: job insecurity, low wages, lack of credit history … These are the five most important reasons why financial institutions refuse a loan. If you plan to request one, you better not feel reflected in any of these scenarios.